EU trade measures could impact 27% of Chinese exports, Goldman Sachs warns

Goldman Sachs estimates that emerging trade measures from the European Union could impact approximately 27% of China's annual exports to the bloc. This tension arises as the trade deficit between China and the EU reaches record levels, with the goods trade deficit hitting €98 billion in the first quarter of 2026.

Rather than implementing blanket tariffs similar to those used by the United States, the EU is expected to adopt a surgical approach. This strategy aims to target specific sectors where Chinese goods are displacing European producers, such as steel, machinery, and basic chemicals. The EU's reliance on Chinese critical materials, including rare earths for electric vehicles and wind turbines, makes broad tariffs less likely.

Additional measures under consideration include potential new tariffs on plug-in hybrid vehicles and the expansion of the Carbon Border Adjustment Mechanism (CBAM). An expansion of CBAM could affect an additional $58 billion in Chinese exports, particularly impacting electrical equipment and machinery products.